Three Things To Like About Jardine Matheson Holdings

There are probably a lot more than three things to like about Jardine Matheson Holdings (SGX: J36). That’s because Jardine Matheson Holdings is a sprawling conglomerate with its finger in more pies than there are pies.

Did anyone say hotels? Yes, Jardines has interest in hotels through Mandarin Oriental (SGX: M04). What about insurance? Yes, it has insurance exposure through its UK-listed Jardine Lloyd Thompson (LSE: JLT).

What about property? Yes, it has that too through Hongkong Land (SGX: H78). It also has motor distribution, palm oil plantations, mining services and it is even involved in airport services through Jardine Aviation Services.

That is the first thing to like about the company – its diversified interests. With many moving parts to the business, it should, in theory, be able to ride the ups and downs of the economic cycle.

Over the last quarter of a century, Jardine Matheson has delivered an average Return on Equity (RoE) of 15%. That is the second thing to like about Jardine Matheson.

The company has delivered a high return on shareholder funds, which in turn has helped to drive the market value of the company. A high RoE implies that investors are making good levels on profit for every dollar they have invested in the company.

In the case of Jardine Matheson, the market value of the company has grown from S$2.5b in 1999 to almost S$30b today. That is the third thing to like about the company – growth. Since 1999, shareholders have enjoyed total annual returns of around 25%. Or put another way, their investments have doubled roughly every three years.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.